Takata, auto executives to face Senate over air bag scandal

Executives from Japan’s Takata Corp and two automakers will face tough questions from U.S. senators on Thursday over the risk of millions of potentially defective air bags that can rupture upon deployment, shooting metal shards into cars.
Automakers, regulators and Takata – which supplies one in five air bags globally – have yet to pinpoint why these air bags are at risk. One theory is that moisture in humid climates can make the air bag inflator’s chemical mix more volatile, even years after installation.
That thinking could be tested later on Thursday as two U.S. Senators have called a news conference with the sister of someone who died in a 2003 accident in Arizona – potentially a sixth fatality linked to Takata air bags.
Arizona has a dry climate and has not been covered by a regional recall focusing on hot and humid areas.
The Arizona death, and the first official confirmation that a Takata-made air bag killed a Florida woman in October, will likely be raised at a U.S. Senate Commerce Committee hearing, where officials from Takata, Honda Motor and Chrysler will testify.
The hearing would be the first intensive public airing of Takata’s air bag problem in a move reminiscent of congressional grillings Toyota Motor (7203.T) and General Motors executives faced over their recall crises in recent years.
Key questions are whether Takata knew of and hid the air bag defects before alerting automakers and regulators; what it has been doing to get to the bottom of the problems; and whether a full nationwide recall is needed.
The U.S. National Highway Traffic Safety Administration this week told Takata and five automakers to expand nationwide the piecemeal regional recalls of driver-side air bags. Takata said it would cooperate if an expanded recall is required, but noted a national recall could divert resources from humid areas where replacement air bags are most needed.
Takata and automakers say it will take time to work out how many more vehicles will need fixing – but it could be in the millions. Honda, Takata’s biggest customer, alone accounts for 2.8 million cars in the regional recalls covering driver-side air bags to date, across 11 states. A total 4.1 million cars are subject to regional recalls including passenger-side air bags.
Since 2008, around 16 million cars with Takata air bags have been recalled worldwide, with more than 10 million of those in the United States.
Another question, particularly for drivers, is how quickly Takata can supply replacement parts.
In filings with NHTSA on Wednesday, automakers including Honda and Toyota said they were looking into the option of getting air bag inflators from other companies, but most said that would take too long. BMW (BMWG.DE) is backing Takata’s efforts to shift inflator production to Germany from Mexico, and said it was not looking elsewhere for supply as it would take two years to approve a new source.
Takata recently told analysts it had enough existing and planned capacity to make replacement parts – but that doesn’t factor in a nationwide recall. Reuters calculations show it could take five months to make just 1 million inflators on two new production lines planned in Mexico from January, assuming work around-the-clock five days a week.
Takata has set aside 77.5 billion yen ($660 million) for recall costs since last year to cover about 9 million vehicles, fewer than the number of cars recalled since 2013.
“The American people deserve to know the whole story behind this air bag recall,” Senator Bill Nelson, a Democrat from Florida who will chair the congressional hearing, said on Wednesday. “That’s why we’re holding this hearing to get them some answers and spur automakers to do more to help get these dangerous cars off the road and fixed as soon as possible.”
Thursday’s witness list includes Hiroshi Shimizu, senior vice president of global quality assurance at Takata; Scott Kunselman, Chrysler’s senior vice president of vehicle safety and regulatory compliance, Rick Schostek, executive vice president of Honda North America, and Stephanie Erdman, a victim of Takata’s air bag defect.
David Friedman, NHTSA’s deputy administrator, will answer to criticism his agency has been slow to respond to the scandal.
NHTSA agreed in June to allow automakers to do a regional recall and use their discretion in deciding how and when to notify customers and replace faulty parts, resulting in confusion for car owners receiving mixed messages.
President Barack Obama said on Wednesday he was nominating Mark Rosekind, an expert in human fatigue, as the next head of NHTSA.

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